California Home Insurance Crisis

Why insurers are leaving California — and what you can do about it

⚠️ Last updated July 2026

This is an active and rapidly changing situation. Insurer availability, FAIR Plan rates, and state regulations are all in flux. Verify everything directly with your insurer or broker before making any decisions.

What happened

Between 2022 and 2024 California experienced a cascade of insurer exits that left hundreds of thousands of homeowners scrambling for coverage. State Farm stopped accepting new home insurance applications in May 2023. Allstate had quietly stopped writing new policies even earlier. Farmers significantly reduced its California footprint. Dozens of smaller carriers followed.

The exits were not random. They were the result of a collision between three forces that had been building for years: catastrophic wildfire losses, rising reinsurance costs, and California regulations that made it nearly impossible for insurers to price risk accurately.

The three forces behind the crisis

Wildfire losses

The 2017 and 2018 fire seasons were the most destructive in California history at the time. The 2021 Dixie Fire, 2023 Maui comparison fires, and the January 2025 Los Angeles fires collectively caused tens of billions in insured losses. Insurers that had priced policies based on historical loss data found themselves massively underreserved.

Reinsurance costs

Insurers buy insurance for themselves called reinsurance to protect against catastrophic loss years. Global reinsurers dramatically raised their California rates or stopped offering California coverage entirely after the wildfire losses. This made it impossible for primary insurers to offer coverage at rates consumers would accept.

Proposition 103 rate restrictions

California's Proposition 103, passed in 1988, requires insurers to get state approval before raising rates and prohibits using forward-looking catastrophe models in pricing. This meant insurers could not raise rates fast enough to reflect actual risk, and could not use the best available science to price future wildfire exposure. The math stopped working.

Who still writes home insurance in California

As of mid-2026 the options for California homeowners are significantly narrower than they were five years ago. Here is the honest picture:

→FAIR Plan — the state insurer of last resort, now the primary option for many Californians. More expensive than standard policies and offers less coverage. Does not cover liability or personal property by default — you need a separate Difference in Conditions policy to fill the gaps.

→Bamboo Insurance — one of the few private carriers still actively writing new California home policies including wildfire coverage. Worth getting a quote.

→Some regional and surplus lines carriers — available through independent brokers, often significantly more expensive than standard market rates but may offer better coverage than the FAIR Plan.

→State Farm, Allstate, Farmers — still servicing existing policies in most cases but not writing new ones. If you have one of these do not let it lapse.

The FAIR Plan — what it is and what it is not

The California FAIR Plan was created in 1968 as a safety net for homeowners who could not get coverage in the standard market — typically people in very high risk areas. It was never designed to be a mass market product. It now insures over 400,000 California homes.

A FAIR Plan policy covers fire, lightning, and smoke damage. It does not cover theft, liability, water damage from plumbing, or most other perils a standard homeowner policy would cover. To get full coverage you need to buy a Difference in Conditions (DIC) policy separately from a surplus lines carrier to wrap around the FAIR Plan. The combined cost of FAIR Plan plus DIC is typically $300–$500 per month for a median California home — two to three times what standard market coverage cost five years ago.

What you should do right now

1.Do not let your current policy lapse under any circumstances. Getting back into the standard market once you have a gap in coverage is significantly harder.

2.If you are with a carrier that is still writing renewals in California, pay your renewal and do not shop around unless you have a specific reason. The grass is not greener.

3.If you have been non-renewed, contact an independent insurance broker immediately — not a captive agent for a single insurer. Independent brokers have access to surplus lines markets that are not available directly to consumers.

4.Get a FAIR Plan quote as a baseline but also ask about DIC policies to understand your total cost for complete coverage.

5.Harden your home — defensible space clearance, ember-resistant vents, class A roof materials. Some insurers will write or re-write policies on homes that have been hardened even in high-risk areas.

Check your options

Use our home insurance tool to see which providers currently operate in California and get direct links to their quote pages. No email required.

See California home insurance options →

Information on this page is based on publicly available reporting and regulatory filings. Insurance availability and pricing change frequently. Always verify current options directly with insurers or a licensed broker. QuoteHonest is not a licensed insurance broker and does not provide insurance advice.